Highlights of Changes to 2014 LIHTC Income Limits

The U.S. Department of Housing and Urban Development (HUD) released income limits for fiscal year (FY) 2014. These income limits are used to determine income eligibility for HUD’s assisted housing programs, including public housing, Section 8, Section 202 and Section 811. Income limits that are used to determine qualification levels and to set maximum rental rates for low-income housing tax credit (LIHTC) or tax-exempt bond projects, which HUD refers to as Multifamily Tax Subsidy Projects (MTSPs), are calculated and presented separately from the Section 8 income limits.

Compared to the FY 2013 income limits, the 50 percent MTSP/very low income (VLI) income limits increased slightly overall. The increase compared to last year is approximately 0.60 percent, which is equal to $166 on average.

According to FY 2014 HUD Income Limits Briefing Material, out of a total of 2,572 areas, there were 289 where the income limits decreased by the maximum of 5 percent. Conversely, there were 132 areas where income limits were increased by the maximum of 5 percent.

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A look at three major metropolitan areas shows a wide range of changes:

San Francisco’s 50 percent MTSP income limits increased $2,600 (4.93 percent). *However, there is no increase in income limit for LIHTC properties that are eligible for the HERA Special income limit, because the 4.93 percent increase is still below the high-water mark.

Los Angeles’s income limit decreased $650 with the new data (1.57 percent). This continues a trend in Los Angeles, where the income limit has decreased each year since 2011.

New York saw a decrease of $500 (0.79 percent).

Keep in mind that if a county has a decrease, existing projects are held harmless and only new projects have a decrease, aside from any rent floor election. Learn more by registering for the Novogradac 2014 HUD Rent and Income Limits and Your Tax Credit Property Webinar.